#29092-a-SRJ
2020 S.D. 40
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
…
CINDY BEA LEEDOM, Plaintiff and Appellee,
v.
DAVID WAYNE LEEDOM, Defendant and Appellant.
…
APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA
…
THE HONORABLE ROBIN J. HOUWMAN
Judge
…
RICHARD L. JOHNSON
Sioux Falls, South Dakota Attorney for plaintiff and
appellee.
THOMAS M. KELLER
Sioux Falls, South Dakota Attorney for defendant and
appellant.
…
CONSIDERED ON BRIEFS
MAY 27, 2020
OPINION FILED 07/15/20
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JENSEN, Justice
[¶1.] David and Cindy Leedom divorced in 2004. The divorce court ordered
David to pay Cindy monthly alimony in the amount of $3,000. David stopped
paying alimony in January 2017, after reaching the age of social security eligibility.
Cindy filed a motion to restore alimony in the circuit court (modification court)
alleging that David was obligated to pay lifetime alimony of $3,000 per month. The
modification court held David’s obligation to pay alimony was continuing. The court
also determined that he owed accrued alimony from the time he stopped paying
until the time of the modification hearing, which totaled $87,000. The court then
reduced David’s monthly alimony obligation to $1,750 beginning on June 1, 2019.
David appeals. We affirm.
Facts and Procedural History
[¶2.] Cindy commenced a divorce action against David in March 2003.
David and Cindy had been married for 22 years. David was employed in the
banking business and earned between $200,000 and $384,000 annually in the four
years prior to the divorce. Cindy worked sporadically during the marriage.
[¶3.] A two-day divorce trial was held in May 2004. At the time of trial,
Cindy was working part-time at a clothing store, earning approximately $2,000 per
month. David testified his income had been reduced to $125,000 annually because
of a downturn in the credit card industry.
[¶4.] The divorce court entered a written memorandum opinion on July 8,
2004, resolving all the issues in the divorce, including Cindy’s request for alimony.
The memorandum opinion required David to pay Cindy alimony of $3,000 per
month, stating:
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The $3,000 per month of alimony will be payable every month to
Cindy until any of the following conditions present themselves:
a. Cindy remarries;
b. David reaches the age of social security eligibility; or
c. David’s income increases substantially.
[¶5.] The memorandum opinion further detailed that:
If Cindy remarries the alimony terminates. If David reaches the
age of social security eligibility and chooses to retire, then
alimony may be subject to modification due to a change in
David’s income, if any. If David’s income increases substantially
over the next fifteen years, then alimony may be modified if
Cindy can establish modification is warranted. Of course,
alimony modification sought by either party may be warranted if
other factors as recognized by South Dakota law are present.
[¶6.] The divorce court entered written findings of fact and conclusions of
law and a decree of divorce (divorce decree) on August 24, 2004. The divorce court
incorporated the findings of fact and conclusions of law from the memorandum
opinion into the divorce decree. The divorce decree provided the following with
respect to David’s obligation to pay alimony:
[David] shall pay to [Cindy] the sum of $3,000 per month
alimony until any of the following conditions present
themselves:
a. [Cindy] remarries;
b. [David] reaches the age of social security eligibility; or
c. Either party undergoes a substantial change in
circumstances.
[¶7.] Over the years, David consistently paid his alimony obligation and
neither party moved to modify alimony. In November 2016, David turned 62 and
became eligible to draw social security. David also retired from his position at
MetaBank in January 2017. He stopped paying monthly alimony after making the
December 2016 payment. Cindy texted David in January 2017 after she did not
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receive the January alimony payment. David responded that he would no longer be
paying alimony to her “by the terms of the decree.”
[¶8.] Cindy filed a motion to restore alimony in October 2017. The
modification court held a hearing on the motion and received evidence from both
parties. Cindy argued that the divorce court had ordered David to pay lifetime
alimony and David had an ongoing obligation to pay $3,000 per month unless
modified by the court. David argued that he was no longer obligated to pay alimony
under the divorce decree after he became eligible for social security and retired.
David also argued that he was not able to pay alimony because he was no longer
earning income.
[¶9.] The modification court entered a written memorandum opinion on May
20, 2019, which was incorporated into a final order. The court determined that
David’s alimony obligation did not automatically terminate under the divorce decree
when David reached the age of social security eligibility and therefore ordered
David to pay the accrued alimony of $87,000 to Cindy for the period from January
2017 through May 2019. The court also reduced David’s ongoing alimony obligation
to $1,750 per month beginning on June 1, 2019.
[¶10.] David appeals raising multiple issues that we state as follows:
1. Whether the original alimony award terminated upon David reaching
the age of social security eligibility.
2. Whether the modification court abused its discretion when it modified
the terms of the alimony obligation. 1
1. David also argues that Cindy should be precluded from requesting alimony
because she waited nearly ten months to file a motion with respect to the
ongoing payment of alimony. David cites no authority for this proposition.
Moreover, because David’s alimony obligation never terminated under the
terms of the divorce decree, his argument is without merit.
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Standard of Review
[¶11.] “We review alimony determinations under the abuse of discretion
standard.” Haanen v. Haanen, 2009 S.D. 60, ¶ 12,
769 N.W.2d 836, 841. A circuit
court’s decision regarding whether to modify an alimony award is also reviewed for
abuse of discretion. Barton v. Barton,
2012 S.D. 44, ¶ 9,
815 N.W.2d 553, 557. This
Court reviews a “circuit court’s findings of fact under the clearly erroneous
standard” and reviews “conclusions of law de novo.” Lowe v. Schwartz,
2007 S.D.
85, ¶ 9,
738 N.W.2d 63, 66-67.
Analysis and Decision
1. Whether the original alimony award terminated upon David
reaching the age of social security eligibility.
[¶12.] David argues that the modification court erred by considering the
divorce court’s memorandum opinion in determining that David’s alimony
obligation did not automatically terminate when he became eligible to draw social
security. He also contends that the divorce decree and the memorandum opinion
are inconsistent as to when his alimony obligation was to terminate. Finally, David
argues that the divorce court intended David’s alimony obligation to terminate
when he became age eligible for social security, and the modification court erred by
concluding otherwise.
[¶13.] SDCL 15-6-52(a) provides in part, “If an opinion or memorandum of
decision is filed, the facts and legal conclusions stated therein need not be restated
but may be included in the findings of fact and conclusions of law by reference.”
The incorporation of a memorandum opinion into a circuit court’s findings and
conclusions “is clearly permitted by SDCL 15-6-52(a) and has been repeatedly
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endorsed by this court.” Eichmann v. Eichmann, 485 N.W.2d 206, 208 (S.D. 1992);
see also Speck v. Anderson,
349 N.W.2d 49, 51 (S.D. 1984) (holding the court’s
findings of fact and conclusions of law incorporated the memorandum by reference);
Saint-Pierre v. Saint-Pierre,
357 N.W.2d 250, 253 (S.D. 1984) (acknowledging that
the trial court’s memorandum opinion was incorporated into the findings of fact and
conclusions of law).
[¶14.] David points to Moser v. Moser to support his claim that the
modification court improperly referenced the memorandum opinion to conclude that
alimony did not automatically terminate when David became eligible for social
security. In Moser we stated, “the memorandum opinion is merely an expression of
the trial court’s opinion of the facts and the law. It has no binding effect. The
findings of fact and conclusions of law and judgment, as signed by the judge, are the
binding statement of adjudication.”
422 N.W.2d 594, 596 (S.D. 1988). However,
Moser specifically referenced that the memorandum opinion “was not incorporated
in the court’s findings of fact and conclusions of law.”
Id. Here, the divorce court
incorporated the findings of fact and conclusions of law from the memorandum
opinion as a part of the divorce decree. Therefore, the modification court properly
referenced the divorce court’s memorandum opinion in considering whether David’s
alimony obligation automatically terminated when he reached the age of social
security eligibility.
[¶15.] David next argues that the divorce court’s memorandum opinion
should not have been relied upon because it was inconsistent with the divorce
decree. He cites Eichmann, where we remanded an alimony award to the circuit
court due to inconsistencies between the court’s conclusions of law and incorporated
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memorandum opinion. 485 N.W.2d at 208. In Eichmann, we held “where the
incorporation creates irreconcilable inconsistencies in the findings and conclusions
that prohibit meaningful appellate review, remand for clarification is necessary.”
Id. However, Eichmann is inapplicable here because the divorce decree and
memorandum opinion in this case are not inconsistent. Rather, the memorandum
opinion is in harmony with the divorce decree and explains the divorce court’s
intentions concerning future conditions that may impact alimony.
[¶16.] The relevant language of the divorce decree provides, “the defendant
shall pay to the Plaintiff the sum of $3,000 per month alimony until any of the
following conditions present themselves: . . . b.) Defendant reaches the age of social
security eligibility; . . .” David interprets such language to mean that his alimony
obligation terminated once he reached the age for social security eligibility.
However, the language did not provide for termination when David became age
eligible for social security. Rather, the language merely described his age as one
condition that may impact David’s obligation to pay alimony in the amount of
$3,000 per month.
[¶17.] The divorce court’s memorandum opinion explains the effect on
alimony if certain conditions occur in the future. In particular, upon David
reaching the age of social security eligibility and choosing to retire, the
memorandum opinion provides that “alimony may be subject to modification due to
a change in David’s income.” 2 (Emphasis added.) The modification court properly
2. This language is in contrast with the self-executing condition of Cindy
remarrying. In such event, the memorandum decision provides that alimony
automatically terminates.
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found that the divorce decree and memorandum opinion were not inconsistent. It
first looked to the divorce decree, which listed the conditions impacting David’s
obligation to pay monthly alimony of $3,000. Finding that one of those conditions
had been satisfied, it appropriately considered the memorandum opinion for further
guidance. Thus, the modification court properly determined that David was
obligated to pay $3,000 per month until the court modified alimony beginning on
June 1, 2019.
2. Whether the modification court abused its discretion when it
modified the terms of the alimony obligation.
[¶18.] Once David was of eligible age for social security and retired, the
divorce decree and memorandum opinion permitted the modification court to modify
David’s alimony obligation “due to a change in David’s income, if any.” The
modification court found that David no longer had any income after his retirement
in January 2017. Based upon this change, the court then considered a modification
of his alimony obligation. Further, even in the absence of the language in the
divorce decree, the modification court had “continuing jurisdiction to modify
permanent alimony as circumstances may require.” Moore v. Moore, 2009 S.D.
16, ¶ 12,
763 N.W.2d 536, 540.
[¶19.] Notwithstanding, David claims that the modification court abused its
discretion in ordering him to continue paying alimony when he had retired and was
no longer earning any income at the time of the hearing. Additionally, he argues
that Cindy was earning a greater income at the time of the modification hearing
than she did at the divorce proceeding and that the modification court improperly
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focused on Cindy’s health conditions, which had not changed and were fully
considered by the divorce court in its original alimony determination. 3
[¶20.] “To justify a change in alimony payments there must merely be a
change of circumstances from the circumstances which existed at the time of the
original decree.” Horton v. Horton, 503 N.W.2d 248, 252 (S.D. 1993).
When the trial court considers evidence as to a change in
circumstances, it must be careful to confine its review to changes
occurring since the time of the divorce. The court is not to reflect
on whether the decree was “equitable” when entered, but only
whether the economic circumstances of the parties have changed
since the award such that the original award is now either
insufficient or excessive. The role of the trial courts in
modification proceedings is not to relieve a party of his or her
bad bargain. The original decree is res judicata except in cases
of changed circumstances subsequently arising, and proceedings
for modification cannot be used to review the equities of the
original decree.
Moore, 2009 S.D. 16, ¶ 12,
763 N.W.2d at 539 (quoting Olson v. Olson,
1996 S.D. 90,
¶ 11,
552 N.W.2d 396, 399-400). “The change in circumstances refers to a change in
the necessities of the recipient and the financial ability of the obligor.” Barton v.
Barton,
2012 S.D. 44, ¶ 15,
815 N.W.2d 553, 558 (quoting Moore,
2009 S.D. 16, ¶ 13,
763 N.W.2d at 540).
3. David also cites language from Savage v. Savage,
2003 S.D. 46, ¶ 22,
661
N.W.2d 762, 768, which stated “the termination of an award of periodic
alimony does not bring an end to the jurisdiction of the court to consider
whether alimony should be reinstated at a later time if a change in
circumstances is demonstrated.” (quoting Saxvik v. Saxvik, 1996 S.D. 18, ¶
11, 544 N.W.2d 177, 180). He argues that if the alimony award had
automatically terminated before Cindy filed her motion, Savage suggests that
the modification court should have only considered her circumstances from
the time the alimony award automatically terminated, rather than from the
time of the divorce decree. Since David’s alimony award did not
automatically terminate, it is unnecessary to address this argument.
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[¶21.] This Court has also considered other factors when evaluating a change
in circumstances, such as “the intentional reduction of gross income; an inquiry into
earning potential when a party is under- or unemployed; the intentional inflation of
expenses; and the offsetting effect of cohabitation on expenses.” Id. (quoting Moore,
2009 S.D. 16, ¶ 14,
763 N.W.2d at 540). “Just as courts must be wary of an alimony
obligor’s efforts to minimize his or her ability to pay through under- or
unemployment, courts must also consider conduct by the alimony recipient to
maximize his or her unmet needs through speculative expenses and the
minimization of support provided by their live-in cohabitants.”
Id. (quoting Moore,
2009 S.D. 16, ¶ 15,
763 N.W.2d at 540).
[¶22.] Here, the modification court conducted a detailed analysis of the
parties’ financial circumstances both at the time of the divorce and at the time of
the modification hearing. The court noted that at the time of the divorce, David was
earning an annual income of approximately $125,000. Later, at the height of his
career, David had annual earnings as high as $475,000. The modification court also
considered that David sustained a significant back injury after the divorce that
affected his ability to work. The injury decreased his income after 2012, and
factored in to his decision to retire in 2017. Although David was eligible to draw
social security in 2017, he elected not to do so at that time in order to increase his
monthly social security draw in future years. David had no other earned income at
the time of the modification hearing.
[¶23.] The modification court also analyzed the changes in David’s assets.
The parties’ net assets at the time of the divorce were valued at less than $500,000.
Since the divorce, David had built a home in Arizona valued at $662,676 and
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another home in Sioux Falls valued at $755,000. The court found that David had
significant equity in both homes. In addition to his homes, the modification court
found that David had bank and investment accounts valued at $4,046,670. 4 David
testified that he continues reinvesting the dividends he receives from his
investments. He also testified that his monthly budget was $16,847, which he is
able to maintain by liquidating assets.
[¶24.] The court then considered the changes in Cindy’s financial
circumstances. At the time of the divorce, Cindy received $115,000 in addition to
the alimony award. Since the divorce, Cindy worked a number of different jobs,
including several managerial positions in retail sales. Cindy’s highest yearly salary
after the divorce was just over $51,000. The modification court found that Cindy
also encountered significant ongoing health issues that had worsened since the
divorce. However, much of the court’s discussion concerning Cindy’s health related
to her ongoing medical bills and their impact on her financial situation. The court
found that Cindy had depleted her 401K to pay these medical bills and had incurred
other debt since the divorce. At the time of the modification hearing, Cindy was
living with her son because of financial issues. The court also found Cindy’s
monthly budget was $4,935.95, while her gross income was approximately
$4,576.58. Cindy testified at the hearing that her employment would soon be
ending because the store she worked at was closing. She expressed concern about
finding comparable employment in her mid-60s.
4. The valuation of David’s accounts were based upon values more than a year
prior to the hearing. The modification court noted that it had not been
provided more recent valuations for David’s assets.
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[¶25.] David’s claim that he cannot be ordered to pay alimony because he is
no longer earning income cannot be squared with our case law or this record.
Consistent with Moore, the modification court properly considered both parties’
overall change in financial circumstances since the time of the divorce, including the
fact that David had retired and Cindy was earning more income than at the time of
the divorce. Despite his retirement, the court found that David was able to
maintain two high-end homes and a monthly budget of over $16,000. Conversely,
Cindy’s monthly budget was less than one-third of David’s budget. She had also
acquired significant debt since the divorce and was living with her son to stretch
her monthly income. Finally, the court also found that neither party purposefully
altered their financial circumstance to affect the alimony determination.
[¶26.] After conducting a full analysis of Cindy’s needs and David’s financial
ability, the modification court found that the changed circumstances since the
divorce warranted a reduction of David’s monthly alimony obligation, but not a
termination of the obligation. Considering the economic circumstances of both
parties, the circuit court did not abuse its discretion by ordering David to continue
paying alimony and reducing the monthly obligation to $1,750.
[¶27.] We affirm.
[¶28.] GILBERTSON, Chief Justice, and KERN, SALTER, and DEVANEY,
Justices, concur.
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